HONG KONG / RankWire.AI / – Alibaba Group has priced a HK$80 billion share placement as it increases spending on artificial intelligence and cloud infrastructure. The Chinese technology company will issue 710 million new ordinary shares at HK$112.70 each. The offering is worth about US$10.2 billion based on current exchange rates. Alibaba expects the transaction to close on Aug. 26, subject to customary closing conditions. The company has designated the proceeds for investments across its AI operations.
Alibaba said all net proceeds from the placement will support its full-stack artificial intelligence capabilities. The planned spending includes expansion and improvements across computing infrastructure that supports AI products and cloud services. Alibaba Cloud has become a central part of the company’s technology operations as demand for computing capacity rises. The group has also increased spending on models, data processing and related infrastructure. Those investments have grown alongside higher revenue from AI-linked products and services.
The placement is aimed at non-U.S. investors outside the United States through offshore transactions. The HK$112.70 issue price represents an 8.4% discount to Alibaba’s HK$123 closing price on Friday. The company’s Hong Kong-listed shares dropped sharply in early Monday trading and fell as much as 10% to HK$110.10. Alibaba also maintains a New York listing through American depositary shares under the BABA ticker. The new shares will expand the company’s equity base after completion.
AI spending rises with cloud demand
Alibaba has already increased capital spending as it expands computing capacity for artificial intelligence. Capital expenditure reached RMB67.68 billion during the quarter ended June 30, equal to about US$10 billion. That figure rose 75% from RMB38.68 billion in the same period a year earlier. The company linked the increase to continued AI infrastructure investment, stronger computing demand and higher chip component prices. The spending increase came during another quarter of rapid growth in its cloud operations.
Alibaba reported quarterly revenue of RMB268.95 billion, or about US$39.6 billion, up 9% from a year earlier. Revenue from AI Cloud and Compute Services reached RMB48.44 billion, equal to about US$7.1 billion. That business recorded annual growth of 45% during the quarter. AI-related product revenue reached RMB12.38 billion and posted triple-digit year-on-year growth for a 12th consecutive quarter. The figures show the scale of activity already running through Alibaba’s AI and cloud businesses.
Fundraising follows three-year investment commitment
The HK$80 billion placement follows a major investment commitment that Alibaba announced in February 2025. The company said it would spend at least RMB380 billion on artificial intelligence and cloud infrastructure over three years. That planned amount exceeded its combined spending in those areas during the previous decade. The current share sale provides additional capital that Alibaba has specifically allocated to its full-stack AI capabilities. The proceeds will therefore enter an investment program that was already underway before this offering.
Higher capital spending has come alongside lower quarterly profit and a large cash outflow. Alibaba reported net income of RMB10.44 billion for the June quarter, down 75% from a year earlier. Free cash flow recorded a net outflow of RMB44.67 billion, with the company citing increased cloud infrastructure investment as a major factor. The latest equity placement adds fresh funding while Alibaba continues its previously announced AI and cloud investment program. Completion remains scheduled for Aug. 26 under the stated closing terms.
